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Evaluate this statement: "American workers earn high wages.  The government must...

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sbridges | Student, Undergraduate | (Level 1) Salutatorian

Posted April 23, 2013 at 8:26 PM via web

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Evaluate this statement: "American workers earn high wages.  The government must protect them against the imports of goods that are from low-wage countries."

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted April 23, 2013 at 8:36 PM (Answer #1)

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Economists would take issue with this statement for a number of reasons.  Let us look at two of the most important of these reasons.

First, there is the idea that high-wage American workers are competing directly with low-wage foreign workers.  This might once have been true, but it is becoming less and less true in recent times.  Most of the jobs that can be sent overseas have been.  American workers who make high wages generally do so in areas that cannot be sent overseas.  American workers make high wages because they add more value to the goods and services that they make.  They compete globally based on the quality of what they do, not on the price.

Second, there is the idea that protectionism will be a net plus for American workers.  Economists do not believe it will be.  The main reason for this is that American workers are also American consumers.  American consumers have benefitted from free trade greatly.  The variety, the quality, and the price of goods available in the US have all improved.  This is largely because of competition from foreign countries.  If we erect trade barriers, we may protect American jobs, but we will also end up paying higher prices for lower quality goods and services.

Economists believe that we should continue to engage in free trade but should ensure that our own workers are getting to be more and more skilled so that they can compete on the basis of their quality, not their price.

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